IT delays and Brexit throw UK’s 53m smart meter project into disarray

Written by on August 29, 2016 in Guest Blog with 0 Comments
E.ON Smart Energy Display

E.ON Smart Energy Display

The UK’s national smart meter project has suffered yet another setback, with the UK government announcing that the critical communications infrastructure that supports the roll out will miss tomorrow’s deadline – and won’t be ready for at least another couple of months.

It adds to the recent spate of government projects under-performing – which include the social welfare revamp that is Universal Credit (already well over budget, and unpopular politically), and the latest attempt to bring the NHS fully into the digital age.

When properly implemented, a national smart metering system opens the door to all manner of efficiency-boosting technologies, like demand-response and increased renewable penetration and storage, as well as allowing utilities to lower their purchasing costs from wholesalers. For consumers, it would provide real-time usage information, which can help them adjust usage behaviors to lower their bills.

The problematic technology in question is the system that is meant to send the meter readings out to the utility that is currently managing that supply – be it a house, business, or industrial campus. The DCC system will also allow consumers to easily switch between suppliers, as currently, smart meters are tied to the supplier.

The company that is responsible for it is called Capita – a name only slightly less infamous in UK public spending than G4S, which has such a long list of controversies that it is outlined in a separate Wikipedia page.

The UK smart meter project is technically being run by Data and Communications Company (DCC), a subsidiary of Capita, but its handling has drawn criticism from the UK’s Citizens Advice Bureau.

It noted that “smart meters can transform the way people use and pay for their energy. This is now the third time in 18-months that this IT project has been pushed back, and we are concerned that the delay to this important communications system will make it harder to meet the 2020 deadline. This could make the overall project more expensive, and hit consumers with higher bills down the line.”

That complaint is a particularly valid one, given that the EU provided an awful lot of outside-funding to UK infrastructure projects. While pro-Brexit voices will say that the UK paid more into the EU than it got out, reallocating the EU payments to projects like these is going to leave an awful lot of projects in the lurch – assuming that the funding does match up at the end, and isn’t reallocated. Even if the smart meter project is given enough money, any delay at this point is going to be felt much more sharply once the UK government gets the ball rolling on the two-year process to leave the EU.

As for the benefits of a national metering program, the 2014 government assessment forecast a total cost of £10.9bn, with the DCC being allocated £2.47bn, generating a total benefit of £17bn – resulting in a £6.2bn net gain. However, there have been rumors that the 2016 assessment (which is meant to come to the surface soon) are in danger of tipping the balance.

 There is a political fear that the additional costs will have to be shouldered by the citizenry, and that’s not something that any government wishes to impose – especially in the post-Brexit climate. The 2016 Impact Assessment may well be the project’s death knell.

However, the current government made a major and unexpected decision to delay the Hinkley Point nuclear power plant factory decision, much to the dismay of EDF’s board (but not its shareholders) and some major Chinese investors. The national roll out, no longer beholden to the EU mandate, is potentially on the chopping block – despite recent government assurances.

Let’s not forget that the initial impetus behind the project was the EU’s Horizon 2020 project – a political and economic alliance that the UK will not be a part of in 2020, assuming that the incumbent government doesn’t try to abandon the political process – with most political analysts saying such a move would be political suicide, and recent opinion polls suggesting that the public perception is still mixed at best, and confused at worst.

To meet its target, the government and the utilities must install some 53m meters in upwards of 30m locations within the next four years. The government target is to install meters in every home, for both electricity and gas. The central communications component was meant to go live in 2015, and if past experience is anything to go by, 2017 seems more likely as a launch date.

Currently, there are around 1.5m smart meters in the UK, according to the Telegraph, with British Gas (and electricity) having deployed around 1.4m of that total. The UK’s Department for Business, Energy, and Industrial Strategy (BEIS) has said that number is over 3.6m. Most utilities have avoided deploying the new meters until the central system is in place, meaning there’s going to be a race to the finishing line.

Written by Alex Davies | First published  at ReTHINK IoT

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